4 ms·

What's the rationale behind this omission on NVIDIA's part?

by sedeki 4y ago

synu 4y ago
Presumably that the fine will be much, much less than whatever the value of the benefit is that they earned from the omission.
- infinityio 4y ago
  The fine was ~$5M, nvidia made ~$10B last year - It's approximately equivalent to the amount of money they make in 4 hours
blihp 4y ago
Minimizing the perception of downside risk in sales when it dries up to keep share prices higher than they otherwise would be. Had they come out and said approximately X% of a given quarter's sales were mining related, it would have most likely been priced into the stock as cyclical sales with a lower resulting multiple. edit: this is an old story see previous discussion https://news.ycombinator.com/item?id=31284952 https://news.ycombinator.com/item?id=31284952
- Out_of_Characte 4y ago
  Thats still strange as the lowered gaming sales are partly due to increasing prices from crypto miners and higher material costs. Their profit margin and sales only grew larger during this time
  - Sakos 4y ago
    The point is that it's unreliable income. The cryptomarket can crash, which will have an effect on future earnings. If nVidia isn't open about how much of their revenue is at risk, investors can't make informed decisions about investing in nVidia.
rcxdude 4y ago
Two things: (GPU) cryptomining is extremely unpopular with PC gamers, especially those who DIY build PCs, because the demand for GPUs for mining is substantially worsening the general GPU shortage, pushing prices even higher. NVIDIA has made a lot of noise about how they are on the 'side of gamers' (such as with their Low Hash Rate cards which have a software lock designed to reduce mining efficiency which held for about a year or so), but in general seems to have been happy in practice to make as much money as they can off of it. So NVIDIA has a marketing interest in downplaying the impact of cryptomining on the shortage while selling as much as they can into the high demand and high prices at the moment. (And tech journalists communicating to these gamers do read these reports and tell the consumers about this stuff) Secondly, from an investors point of view, GPU cryptomining demand is seen as a lot more volatile than PC gaming demand. A crypto crash or the planned ethereum switch to proof of stake could reduce this demand substantially. If a larger fraction of NVIDIA's sales (and thus revenue) is due to cryptomining, it's less likely to be similar next year (not only because cryptomining might buy less new cards, but also because they might flood the market with used cards, reducing demand for new cards from PC gamers, which happened during the last big crypto crash). This is the main reason the SEC is not happy about it. When reporting to investors NVIDIA also has an incentive to downplay crypto-related demand.

What's the rationale behind this omission on NVIDIA's part?

by sedeki 4y ago

What's the rationale behind this omission on NVIDIA's part?

synu 4y ago

Presumably that the fine will be much, much less than whatever the value of the benefit is that they earned from the omission.

infinityio 4y ago
The fine was ~$5M, nvidia made ~$10B last year - It's approximately equivalent to the amount of money they make in 4 hours

blihp 4y ago

Minimizing the perception of downside risk in sales when it dries up to keep share prices higher than they otherwise would be. Had they come out and said approximately X% of a given quarter's sales were mining related, it would have most likely been priced into the stock as cyclical sales with a lower resulting multiple. edit: this is an old story see previous discussion https://news.ycombinator.com/item?id=31284952 https://news.ycombinator.com/item?id=31284952

Out_of_Characte 4y ago
Thats still strange as the lowered gaming sales are partly due to increasing prices from crypto miners and higher material costs. Their profit margin and sales only grew larger during this time
- Sakos 4y ago
  The point is that it's unreliable income. The cryptomarket can crash, which will have an effect on future earnings. If nVidia isn't open about how much of their revenue is at risk, investors can't make informed decisions about investing in nVidia.

rcxdude 4y ago

Two things: (GPU) cryptomining is extremely unpopular with PC gamers, especially those who DIY build PCs, because the demand for GPUs for mining is substantially worsening the general GPU shortage, pushing prices even higher. NVIDIA has made a lot of noise about how they are on the 'side of gamers' (such as with their Low Hash Rate cards which have a software lock designed to reduce mining efficiency which held for about a year or so), but in general seems to have been happy in practice to make as much money as they can off of it. So NVIDIA has a marketing interest in downplaying the impact of cryptomining on the shortage while selling as much as they can into the high demand and high prices at the moment. (And tech journalists communicating to these gamers do read these reports and tell the consumers about this stuff) Secondly, from an investors point of view, GPU cryptomining demand is seen as a lot more volatile than PC gaming demand. A crypto crash or the planned ethereum switch to proof of stake could reduce this demand substantially. If a larger fraction of NVIDIA's sales (and thus revenue) is due to cryptomining, it's less likely to be similar next year (not only because cryptomining might buy less new cards, but also because they might flood the market with used cards, reducing demand for new cards from PC gamers, which happened during the last big crypto crash). This is the main reason the SEC is not happy about it. When reporting to investors NVIDIA also has an incentive to downplay crypto-related demand.